Crime and Policing Bill

Lord Vaux of Harrowden Excerpts

Committee stage
Wednesday 7th January 2026 Lords Chamber

Moved by

[Lord Vaux of Harrowden]

358: Clause 114, page 145, line 16, at end insert “or virtual subscriber identity module.”
Member’s explanatory statement
This amendment is intended to ensure that SIM farms would also include devices capable of using virtual SIM cards rather than only physical SIM cards.

[Lord Vaux of Harrowden (CB)]

My Lords, as this is the first time I have spoken on the Bill, I apologise that I was unable to take part in the Second Reading debate due to a clash with other House business.

Amendment 358 is a very simple extension to what the Bill already does, and I thank the noble Baroness, Lady Morgan of Cotes, and the noble Lords, Lord Young of Cookham and Lord Holmes of Richmond, for adding their support to it.

I was a member of the Fraud Act 2006 and Digital Fraud Committee, chaired brilliantly by the noble Baroness, Lady Morgan, which reported in November 2022. It was a lengthy report—fraud is a huge subject—with many recommendations. One area we raised was the use of SIM farms by fraudsters to send out bulk texts and make bulk calls, so I am very pleased that we are at last bringing in restrictions on the use and supply of SIM farms in Clauses 112 to 117. I am glad that the Bill allows other articles to be added to this. Both technology and the ways in which fraudsters use that technology to make contact with potential victims are constantly changing, so having the flexibility to react is important. It is also important to recognise, as the Bill does, that there are some legitimate reasons for the use of a SIM farm.

Unfortunately, however, the world has moved on since we reported in 2022. Clause 114 defines a SIM farm as

“a device which is capable of using five or more SIM cards simultaneously or interchangeably”.

It then goes on to define a SIM card as being

“a removable physical subscriber identity module”.

The problem is that physical SIMs are being overtaken by virtual SIMs, or eSIMs. A number of the latest phones no longer even have slots for physical SIM cards, and the trend is accelerating. The SIM farm restrictions that the Bill introduces are already at risk of being redundant before the Bill is even passed.

Amendment 358 simply attempts to fix this by including virtual SIMs in the definition, so that SIM farms that utilise eSIMs will also be covered from day one. If we do not make this change, the SIM farm restrictions will quickly be pointless. I realise that this might be a little more complicated, as a number of newer phones can store more than five eSIMs—although most only allow two to be active at any one time—so we might need to make some tweaks to the wording of Clause 114 a little further than this amendment does. But the point remains: we know that physical SIM cards are being phased out over time, to be replaced by eSIMs, so we should act now to ensure that this part of the Bill is not redundant as soon as it comes into force. That is the point of this amendment.

However, the use of SIM farms raises a wider issue, on which I would be interested to hear the Minister’s views. We can ban the sale and use of SIM farms in this country, and we should, but fraud increasingly comes from overseas, where a UK ban will have little or no impact. The real problem is that fraudsters are able to acquire an apparently limitless supply of UK mobile phone numbers. I do not know about other noble Lords, but I am currently receiving almost daily calls from UK mobile numbers, where someone who speaks poor English tells me they are calling from O2 and there is a problem with my SIM card. It does not matter how many I block; they just keep coming, each time on a different number, and I am sure I am not alone in that.

In November 2022, Ofcom issued guidance to telecoms companies about the allocation and supply of UK phone numbers. The guide set out the steps that Ofcom expects providers to take when suballocating and assigning numbers. Numbers can be suballocated an unlimited number of times, which makes controlling who ultimately acquires them difficult, and the guidance is only as good as the final link in that chain.

The guide covers three areas: due diligence checks before suballocating or assigning numbers; ensuring continued compliance and reassessing risk after the transfer of the numbers; and responding to incidents of misuse. But despite this guide, it remains almost comically easy to acquire pay-as-you-go SIM cards in bulk. A quick Google search shows myriad websites of varying legitimacy selling bulk SIMs, both physical and eSIMs. The very first listing on an eBay search for bulk SIMs is a package of 1,000 EE pay-as-you-go SIM cards for £999 or best offer. Many of the websites have reseller arrangements where anyone can earn commission by selling SIMs on to further end-users.

There are legitimate reasons why someone might buy SIMs in bulk: internet of things connectivity, company travel or legitimate mass marketing, for example. But they can also be used for mass scam phishing messages or calls, identity theft, SIM swapping, money laundering and creating bulk social media accounts, to list just a few.

It is too easy for fraudsters to acquire large numbers of genuine UK numbers under the current system. This is not about spoofing numbers; these are real numbers. KYC checks on end-users of bulk SIMS appear to be laughably weak and do not appear to be policed in any meaningful way. When was a telco last fined for this? What meaningful monitoring actually takes place of where these numbers end up and how they are used?

The new voluntary UK Telecommunications Fraud Sector Charter, published in November, says only that signatories will:

“Continue to implement existing CCUK guidance on preventing misuse of sub-allocated and assigned numbers and monitoring for fraudulent calling patterns”.


That is clearly not working at present. We need to do more.

In addition to his response to the specific amendment on eSIMS, I would be grateful to hear the thoughts of the Minister on how we might make life more difficult for the fraudsters who are able to operate easily on an industrial scale from foreign countries using real UK phone numbers. Does he agree that it is time to strengthen, monitor and enforce KYC rules on the bulk sale of phone numbers? I beg to move.

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In essence, we have put in place clauses to the Bill that had cross-party support and were encouraged by the noble Baroness’s committee. We have the power to regulate, subject to consultation, which meets the noble Lord’s objectives, and we will look at issues of international action as a key step in the three-year fraud strategy that will shortly be produced. With that, I hope the noble Lord will withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank all noble Lords who have taken part in this short but important debate. I am grateful to the Minister for his detailed response. I think I speak for all of us in saying that we look forward enormously to seeing the long-awaited fraud strategy. I think it will be the third one since I have been in this House. Anyway, a lot of what the Minister said definitely moves in the right direction.

On the amendment, I am a little disappointed because, although I hear what the Minister says about the evidence base, which is obviously backward-looking, we know that the situation is changing. Physical SIMs are being replaced by eSIMs at a fairly rapid rate. This is something that we know is changing and it would be better to future-proof the Bill at this stage if we can. I take on board his point that eSIMs are more traceable than physical SIMs. But part of the problem is that that is not always the case in a lot of countries, and eSIMs can be from anywhere. So, I take only a certain amount of comfort from that.

That said, and given the Minister’s assurances that this will continue to be looked at and, if the evidence base supports it, changed, at this stage I beg leave to withdraw my amendment.

Amendment 358 withdrawn.

Crime and Policing Bill

Lord Vaux of Harrowden Excerpts

Committee stage
Wednesday 7th January 2026 Lords Chamber

Moved by

[Lord Vaux of Harrowden]

367: After Clause 117, insert the following new Clause—
“Technology and telecommunications companies’ liability for APP fraud reimbursementWithin six months of the day on which this Act is passed, the Secretary of State must prepare and publish a report, and lay it before Parliament, setting out proposals for ensuring that technology and telecommunications companies—(a) owe a duty of care to their customers to prevent fraud being originated on platforms or services that they provide, and(b) contribute to the costs of reimbursing victims of Authorised Push Payment fraud, where such fraud has originated on services or platforms provided by the relevant company.”Member’s explanatory statement
This amendment would require the Secretary of State to bring forward proposals to ensure that technology and telecommunications companies have a duty of care to prevent fraud and meet a share of the costs of reimbursing APP fraud victims.

[Lord Vaux of Harrowden (CB)]

My Lords, we come back to fraud. As the Minister will be well aware, this is not the first time I have raised the issue of ensuring that the technology and telecoms companies take their share of responsibility for the use of their services or platforms by fraudsters and are made to contribute to the costs of reimbursing victims. I thank the noble Baroness, Lady Morgan of Cotes, and the noble Lords, Lord Young of Cookham and Lord Holmes of Richmond, for their support on this amendment.

On a previous group I mentioned the Fraud Act 2006 and Digital Fraud Committee, on which I was privileged to sit. Our report, Fighting Fraud: Breaking the Chain, which was published in November 2022, made the very clear conclusion:

“Until all fraud-enabling industries fear significant financial, legal and reputational risk for their failure to prevent fraud, they will not act”.


That has been borne out over the three years since. There has been no significant improvement, despite the voluntary charters that have been agreed. Only the banks are on the hook for the costs of fraud under the mandatory APP reimbursement rules that were brought in by the Financial Services and Markets Act 2023. The banks must now pick up 100% of the reimbursement liability, and there is evidence to suggest that this is having a positive impact on the efforts that the banks are making to identify and prevent fraud.

Similarly, the Payment Systems Regulator’s six-monthly reports on the performance of the banks has provided welcome transparency as to which banks and payment services are doing most, and least, to combat fraud. As an aside, it would be good to have confirmation from the Minister that the subsuming of the PSR into the FCA will not reduce the important reporting and oversight of APP fraud that the PSR has been providing.

The banks are picking up the liability, but they are not where the fraud originates. According to UK Finance statistics, around 70% by volume and 30% by value arises from online platforms, and 16% by volume and 36% by value arises from telecoms—calls and texts. Let us name names. According to the PSR, over half of APP scams originate on Meta platforms—Facebook and so on.

Nothing has changed that would change the conclusion of the committee that these industries will not take the issue seriously until they face liability for what they allow to happen on their platforms or services. The banks have sharpened up their acts, in part because of the mandatory reimbursement requirement that we have imposed on them. The banks face real liabilities for the fraud that goes through their accounts.

The Online Safety Act includes some important measures to prevent fraudulent content and scam advertising, but it does not make the companies liable for the losses. We have mandated that the banks should reimburse victims of APP scams after we decided that the voluntary code was not working, and it is now time that those who enable the frauds should pick up their share on a compulsory, not voluntary, basis. There are many possible ways to achieve this, so I have not been prescriptive in the amendment. It could be as simple as bringing the telcos and tech companies into the reimbursement requirements, or we could look at extending the new failure to prevent fraud offence so that it covers the use by third parties of services provided by a company. The failure to prevent offence currently covers only actions by employees or associates, so it would not cover scams in this situation.

Amendment 67 would simply require the Government to bring forward proposals for how to do this within six months of this Bill passing. It is not enough to keep publishing more fraud strategies. The one that is due to be published shortly, which I am sure the Minister will refer to, will be the third fraud strategy since I have been a Member of this House. The Minister said earlier that the fraud strategy would be published soon—I think he said, “in very short order”. I know that he cannot give a date, but it would be helpful to know whether that will be before Report. The content of the strategy might make this amendment unnecessary, so it would be very helpful if we could see it before Report.

Fraud and scam figures are not falling; they still make up around 40% of all crime in the UK. It really is time that we make those who allow their services to be used by the fraudsters, and those who enable the fraud, liable for their actions—or, rather, lack of action. It is the only way to make them take the issue seriously. I beg to move.

[Baroness Doocey (LD)]

We are very happy on these Benches to support this amendment. We all know the grim scale of fraud, now our most common crime. Authorised push payment scams are driven by online platforms, adverts on social media fuelling shopping and investment frauds, and hacked accounts enabling ticket scams. Yet, as has been said by the noble Lord, Lord Vaux, platforms such as Meta, which owns Facebook and Instagram, can still take six weeks to remove illegal content, allowing scammers to resurface again and again—so-called “life-boating”.

This amendment is designed to cut through that inertia. It would provide a clear statutory duty of care on tech and telecom firms to prevent scams at source, using their own AI and tools. It would also require them to share the financial burden with payment providers, which must already imburse many victims of authorised push payment fraud. That seems a fair step, given that the platforms host most of the scams and profit from the engagement that keeps users scrolling. Weak voluntary charters, non-binding Ofcom guidance and even the Online Safety Act’s proportionate measures have let these firms do the bare minimum—reacting to reports rather than proactively detecting fraud through verification, AI-driven scans and systematic audits. Big tech has unparalleled know-how—the AI, software and manpower to spot fraudster patterns and take them down. Banks cannot fight this alone and nor can the police. This amendment would compel these companies to protect their users, stopping scams upstream.

We hope that the Government’s fraud strategy follows the example of this amendment and goes even further with a failure to prevent fraud offence, backed by strong fines and tougher binding Ofcom standards. Meanwhile, Amendment 367 would provide some timely backbone, giving tech and telecom firms a real incentive to act swiftly before yet more victims lose potentially everything.

--- Later in debate ---

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, this Government are deeply concerned by the devastating impact online fraud can have on individual victims, both financially and emotionally. I am grateful to the noble Lord, Lord Vaux of Harrowden, for tabling this amendment, to the noble Lord, Lord Young, and to the noble Baroness, Lady Doocey, for helping us to understand and acknowledge the importance of this issue. The Government recognise the importance of preserving trust in digital communications and online spaces in order that all our hard-working businesses operating in the UK can grow and prosper. We recognise that incentives are important for accountability for all stakeholders.

The Government have seen a significant contribution from the banking sector in preventing fraud and supporting victims in response to the Payment Systems Regulator’s new authorised push payment scams reimbursement requirement. In the first nine months of the APP reimbursement scheme, 88% of eligible losses were reimbursed, with £112 million returned to victims. These figures reflect a strong and sustained commitment to protecting consumers—a positive trajectory that deserves recognition. While we are on the PSR scheme, the noble Lord, Lord Vaux, asked about the transition of PSR into the FCA. It is worth noting that we consulted on that planned merger of PSR into the FCA in September and October last year. We are currently considering the responses to that consultation and will bring forward further proposals in due course. He would expect me to say that we want to manage this process in a way that very much does not undermine the work that the Payment Systems Regulator is already doing to ensure that this system works well.

However, every part of an ecosystem must play a meaningful role in fraud prevention, including the telecommunications and tech sector. The Government have already taken steps to ensure that the tech and telecommunications sectors are rightly incentivised to proactively tackle fraud on their networks. The Online Safety Act requires in-scope companies to take proactive steps to stop fraudulent content appearing on the platform and to remove fraudulent material quickly when they become aware of it. If they do not, they risk facing the full regulatory costs of failing to comply, which can extend to 10% of their global revenue.

Ofcom’s duties on user-generated content are now in force in relation to several online harms, including fraud, and the regulator is already assessing platforms’ compliance. Further duties concerning action against fraudulent advertising will be consulted on this year and are likely to come into effect in 2027.

The telecoms sector is subject to regulation that requires providers to block calls that appear to be from scammers and to prevent scammers from using telephone numbers. It is fair to point out that there has been a fair amount of success already in that effort. Voluntary action has proved effective, and under the first telecoms charter operators have introduced firewalls that have stopped more than 1 billion scam text messages since January 2022, so that indicates the scale of both the problem and the progress that has been made.

We are also working with the sector and Ofcom on a number of innovative further actions to tackle the criminal abuse of telecoms networks. The Government launched the second Telecoms Fraud Charter in November 2025. This is an ambitious charter that covers 50 actions the telecoms industry will implement to tackle fraud within the sector. It includes developing new AI systems to detect and prevent fraud, building a new call-tracing system to track down fraudulent communications and upgrading the UK’s networks to enable new features to protect customers from spoof calls. This is a voluntary commitment from the telecoms sector that aims to strengthen efforts to further identify, block and disrupt telecoms fraud through enhanced industry collaboration and robust duty of care towards UK consumers and smaller telecoms businesses that have themselves been victims of fraud. The previous Telecoms Fraud Charter helped UK mobile network operators to block over 1 billion scam messages through the implementation of firewalls. We want to go further than that, which is what the new telecoms charter seeks to achieve.

In addition, Ofcom launched a consultation in October, outlining new rules on how mobile providers must stop scammers sending mobile messages. These proposals draw on existing best practice in the mobile sector and are intended to both prevent scammers accessing mobile messaging services and stop their activities where they have gained access. Last July, Ofcom also published a consultation on new rules to stop scammers outside the UK reaching people and businesses with calls that imitate UK mobile numbers, and these are likely to be introduced this year. We expect these measures to address gaps in the industry’s existing counterscam measures, and to significantly reduce the risk of individuals and businesses receiving scam messages.

Furthermore, in the upcoming fraud strategy, which we discussed earlier in Committee, and which was mentioned by the noble Lord, Lord Vaux, the Government will explore options to make it harder for criminals to exploit UK telecoms networks to commit fraud. The noble Lord tempted me to stray off the primrose path of prudence when it comes to timing; I am afraid I cannot do any better than repeat what my noble friend the Minister said: it will be coming in due course. Obviously, we have some time left even in Committee, let alone further stages of this Bill, so I am afraid I can make no commitments there.

The Government will continue monitoring developments in this area to ensure the telecommunications and tech industries remain accountable for delivering on their commitments to tackle fraud and the criminal abuse of their services, in line with the plan we will set out in our soon-to-be-published fraud strategy. However, where insufficient progress is being made in reducing abuse of telecoms networks or tech platforms for the purposes of fraud, the Government, and regulators, will not hesitate to take necessary measures to compel further action. I am on common ground with the noble Lord, Lord Davies, who critiqued the amendment, describing the concern it shows for the intermediary nature of the liability some telecoms platforms would be under. It is a fact that a tech sector reimbursement scheme would undermine the UK’s long-standing intermediary liability regime, which means that platforms are not liable for illegal content posted by users provided they are unaware of the unlawful activity, and which underpins the interactive internet and is a cornerstone of digital innovation. I share his concern that a departure from intermediary liability would leave the UK out of sync with our international partners and potentially threaten growth of the UK’s digital economy.

Therefore, in view of the clear plan we are putting in place to tackle fraud, it is the Government’s assessment that the measures set out in this amendment are not necessary at this time, and I invite the noble Lord to withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank every noble Lord who has taken part in this short debate, in particular the noble Baroness, Lady Doocey, and the noble Lord, Lord Young, who both pointed out the question of incentivisation, which is core to this. We need to incentivise the people who are facilitating or enabling fraud, or enabling the fraudsters to make contact with the victims, to do the right thing.

Social Media: Scam Adverts and Fraudulent Content

Lord Vaux of Harrowden Excerpts

Thursday 11th December 2025 Lords Chamber

[Lord Hanson of Flint (Lab)]

I am grateful to my noble friend for that. The Government have already signed a United Nations resolution against fraud, and we are hosting a conference in Vienna in March next year to try to bring together international action on the very issues that my noble friend has mentioned. Independently, I went to Nigeria in April this year and signed an agreement with the Nigerian Government on fraud and scammers, my right honourable friend the Prime Minister has done one with Vietnam recently, and we intend to expand that further to other key nations. It is vital that we have international co-operation to tackle areas where scammers are operating from, very often against the will of the host Government.

[Lord Vaux of Harrowden (CB)]

My Lords, fraud is not falling, despite all the efforts that have been put into it so far. The National Crime Agency estimates that 67% of fraud is cyber-enabled. It says:

“Social media platforms are a key facilitator of authorised push payments frauds”.


Social media platforms and telecoms are the main route by which fraud comes to this country from overseas scammers, as referred to by the noble Baroness, Lady Jones. At the moment, banks pick up the full cost of reimbursing fraud victims. Banks have a key role in preventing fraud but they are not the facilitators of it. Surely the time has come to make social media platforms and telecom companies pay their share of the losses that people suffer as a result of their facilitation of fraud.

[Lord Hanson of Flint (Lab)]

I am grateful to the noble Lord. He is absolutely right that the banks are effectively subsidising fraud results and are leading to the repayment of an amount of the fraud that is taking place. He is also right that a large portion of that fraud, which is around 44% of all crime, goes through telecommunication companies. We recently established a brand new fraud charter with telecom companies, which I believe will reduce fraud via telephone communication significantly over the next 12 months. In the fraud strategy we will discuss the potential for reducing fraud through telecommunications platforms and through platforms such as Meta/Facebook and others, which are a significant gateway to fraud. The noble Lord is absolutely right, but I will have to reflect on those matters as part of the forthcoming fraud strategy.

Jaguar Land Rover Cyberattack

Lord Vaux of Harrowden Excerpts

Tuesday 14th October 2025 Lords Chamber

[Lord Leong (Lab)]

I thank my noble friend for that question. I have not read the article, but I will surely do so. The Government recognise the major role that UK cybersecurity professionals play in enhancing and protecting UK security, and it is vital that we support them. However, the defences are pretty complex, and we need to be very careful. While there are robust safeguards and oversight, we have concerns about how any defence could be exploited by cybercriminals and significantly hinder the successful investigation and prosecution of bad actors, so the Home Office is working closely with the National Cyber Security Centre, law enforcement and industry on this issue and will provide an update in due course.

[Lord Vaux of Harrowden (CB)]

My Lords, studies indicate that between 50% and 80% of cyberattacks result in the payment of a ransom. Ransom amounts are probably well over £1 billion a year, so it is no great surprise that cyberattacks are increasing: it pays well. Have the Government considered making the payment of ransoms by both public and private sector entities illegal?

[Lord Leong (Lab)]

The noble Lord makes an important point. I share with noble Lords that in the UK ransomware is considered the greatest of all serious and organised cybercrime threats and is deemed a risk to the UK’s national security by the National Crime Agency. In January 2025, the Home Office launched a consultation on a package of proposals to reduce the threat that ransomware poses to the UK economy. Alongside this consultation, significant stakeholder engagement also took place. Three proposals were consulted on: first, whether there should be a targeted ban on ransom payments to owners; secondly, a ransom payment prevention regime; and, thirdly, whether there should be a mandatory incident and reporting regime. The Home Office is progressing a new package of measures to protect UK businesses, and we will update the House accordingly.

Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025

Lord Vaux of Harrowden Excerpts

Wednesday 10th September 2025 Grand Committee

[Lord Sikka (Lab)]

My Lords, I congratulate the Minister on retaining his position after the recent reshuffle of the Cabinet.

Despite recent reforms of Companies House, several issues remain unaddressed and the legislation in front of us does not really deal with them. I will illustrate my concerns with three pieces of empirical evidence. I can do more, but I do not have time.

The first concern is exemplified by a company called Herran Finance plc, which is company number 12370122 at Companies House. It was incorporated on 18 December 2019, with issued share capital, so its accounts claim, of £59,892,205. Its purpose is to provide financial services. This is a dormant company. It has never traded. The rudimentary accounts filed at Companies House show that it had cash in hand and at bank on 31 December of—guess what—£59,892,205. Amazingly, exactly the same amount was held a year later when the accounts for the following year were filed on 12 August 2022.

The company is engaged in banking, though it does not have the word “bank” in its name, which, as we know, is reserved for certain types of organisations. Its name does not appear on the FCA list of authorised firms. None of its directors is on the FCA list of authorised individuals. No person of significant control statement could be found at Companies House. The company’s page at Companies House noted on 10 October 2023:

“Compulsory strike-off action has been suspended”.


There has been no update since then. That is, nearly two years have elapsed.

This is a fake company that may have duped people. It actually has a website and its address is herran.co.uk, which has all the hallmarks of a scam. It describes itself as

“the 10th oldest bank in the country”

and says that deposits with it are safe because they are insured with the Federal Deposit Insurance Corporation —yes, a UK-based bank covered by US depositor protection. If anyone needed a sign of fraud, there it is. The website is an exact clone of a genuine bank.

Some five years after the incorporation of this organisation, no attempt has been made by Companies House to see that the accounts are genuine or that the company is licensed to carry out the described activities. Can the Minister explain who checks whether a fake bank has been incorporated at Companies House and how often these checks are made? Who are they reported to?

Directors of Herran provide a UK address but do not appear to live there. Companies House does not require proof of address when you first create a company. Anybody’s address can be used and, paradoxically, the injured party must provide evidence of the proof of address to correct data held at Companies House—but crooks do not have to. Can the Minister explain why no authentic proof of address is needed to register a company at Companies House?

Does the Minister agree that the filing of false information at Companies House should be a criminal offence? Why is that not already the case? What is the Government’s plan to deal with this? We have a lot of debates around immigration, but fake companies can be used to secure work visas. Can the Minister tell the House how many work visas have been secured by false companies? How do the Government know how many have been issued? Is there any check at any time? That is my first piece of evidence.

My second piece of evidence is that numerous fake banks are routinely registered at Companies House. Examples include “CITIC Limited”, “The Toronto Dominion Ltd”, “JPMorgan Chase Ltd” and “Goldman Sachs Finance Ltd”, and all these had a common director: a person named Barbarat Giuseppee, who claims to be an Italian living in France. The address given is probably non-existent, and the person probably does not exist either. The same Giuseppee currently holds seven company directorships according to Companies House. Yet nobody has bothered or cross-checked; nobody seems to be doing any job in tackling the crooks.

No amount of identity verification can confirm that a foreign national forming a UK company is genuine, as the UK does not have access to the passport or birth certificate databases of other countries. Even if a genuine foreign national is caught in illicit practices, UK law cannot be enforced on any person living in another country. Around 900,000 UK-registered companies do not have a UK director. Evidence shows that a company with only foreign directors is 17 times more likely to show signs of fraud, yet nobody has bothered to deal with this particular problem.

Genuine companies are not informed by Companies House or anybody else of the existence of fake companies abusing their name. As and when they discover this, they are left to incur legal costs out of their own pocket to fight fraudsters. Can the Minister explain why Companies House registers blatantly fake companies? Does he agree that we need a law requiring all UK-registered companies to have at least one UK citizen as a director? That way, at least we would know whom exactly to hold to account.

My third piece of evidence relates to a law firm that was shut down in October 2023. The name of the firm is Axiom Ince Ltd and it was closed by the Solicitors Regulation Authority. Some £64 million of clients’ money was missing. Unaudited accounts for the year to 31 March 2022 were filed at Companies House on 7 February 2023. They were not audited because directors claimed that the company was a small company. It was not, because it did not satisfy the requirements of the Companies Act definition.

An accountancy firm named Adrian C Mansbridge & Co. issued an accountants’ report and went along with the directors’ fiction—for a fee, of course. Subsequently, the Institute of Chartered Accountants in England and Wales fined the firm the puny sum of £2,100 and recovered the disciplinary costs of £2,200. The ICAEW keeps the fines to swell its coffers. The whole thing is a racket. Accountancy trade associations make money by licensing accountants and auditors and then profit again from their misdemeanours.

Companies House never checks accounts to see whether any of the audit exemptions claimed are appropriate. Can the Minister explain who checks to ensure that the accounting and auditing exemption requirements are not abused? He cannot say that it is up to the directors, because they are party to the wrongdoing, and he cannot say it is up to the auditors and accountants, because they are party to the wrongdoing as well.

So, currently, there is no central enforcer of company law, and the deregulatory zeal in political circles at the moment is unlikely to deliver the required transparency or freedom regarding economic crime, which is what the Minister said the legislation in front of us will deliver. I look forward to his response.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank the Minister for introducing these regulations. It is good to hear from him on the progress Companies House is making in cleaning up the register and the process of verification, although, as the noble Lord, Lord Sikka, has just demonstrated so clearly, it is a work in progress.

The Register of People with Significant Control (Amendment) Regulations 2025 are fine so far as they go, but they still leave it far too easy for persons with significant control to disguise themselves and, therefore, not be disclosed on the register as they should be. We discussed this loophole at some length during the passing of what the noble Lord called the 2023 Act. It relates to the use of undisclosed nominee share- holders.

During the process of passing the Act, this House passed an amendment on Report that would have required shareholders holding 5% or more to declare whether they are holding those shares on behalf of another person. That amendment was ultimately dropped during ping-pong after a compromise was reached with the then Government that inserted into the Bill a power for the Secretary of State to regulate to strengthen the rules around nominees’ shareholdings.

A PSC has an obligation to state that they are a PSC, but a dishonest actor would not do so. The problem we have is that the onus on reporting PSCs falls to the company, and the obligations on the company under the statutory guidance are quite weak. The statutory guidance says that the company should simply scan its share register and identify any shareholders who hold 25% or more. It is easy therefore for a PSC who wishes to hide their identity to structure their holdings via a number of shareholdings below that 25% threshold. For example, five holdings at 20% would give 100% control.

All the dishonest actor has to do to hide that control is find five willing people who are prepared to have their name on the shareholder register and hold shares on behalf of the dishonest actor as nominees. There is no comeback for those nominees. They have no obligation to disclose the nominee arrangement unless the company actively asks them to, which it does not have to do if the shareholding is below 25%. So the company could quite legitimately say that it had followed the guidelines and state that it does not have a PSC because it could not see any shareholders above the 25% threshold.

A whole industry of nominee companies has grown up, as you can see if you google “nominee shareholders”. If the Minister has not done that, I urge him to take a look. Although there are perfectly reasonable uses for nominee shareholdings, it is fair to say that most of the nominee companies make it pretty clear on their websites that the primary purpose is simply to hide the beneficial ownership of the shareholding, which they will do for just £200 a year. Very few of them point out the PSC rules. Forcing those nominees to lie on the record to hide the identity of the beneficial owner would, at the very least, concentrate their minds and make it much harder for a dishonest PSC to find nominees prepared to hide their identity.

My questions for the Minister are as follows. What analysis have the Government done on this since the Act was passed? Does he recognise the issue? Is there any plan to use the powers that were inserted into the Act during ping-pong to deal with it?

[Lord Sharpe of Epsom (Con)]

My Lords, I, too, am delighted to be able to welcome the Minister back to his place. I should have done so earlier, in the Chamber, but I am very pleased to see him there. I am grateful to him for introducing these three important instruments and for so clearly setting out the Government’s rationale. For the record, I should probably declare that I have been a member of an LLP, but I am not any more. Together, these instruments continue the implementation of the Economic Crime and Corporate Transparency Act 2023, with the shared objective of enhancing transparency, reducing fraud and strengthening the integrity of the UK’s corporate environment. For the record, I should say that I agree very much with the noble Lord, Lord Vaux. It is very good to hear the progress being made with regard to Companies House. We will come back to that.

Employment Rights Bill

Lord Vaux of Harrowden Excerpts

Report stage
Wednesday 16th July 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, the Government’s intention to protect workers is commendable. We all agree that fairness, dignity and security at work are essential pillars of a just society. However, the approach taken in this Bill, particularly the changes to unfair dismissal rights and the introduction of a statutory probationary period, is confused and counterproductive. What the Government have failed to grasp is that, when businesses are given the flexibility to manage their workforce pragmatically, that is precisely when they are more likely to take on new staff. Hiring is always a risk. By heightening that risk and making it more difficult to manage, this Bill creates disincentives to hire, particularly at the margins of the labour market, where the stakes are highest.

This is fundamentally a question of incentives. Reduce the employer’s ability to assess suitability, cultural fit or even basic reliability, without the spectre of legal sanction, and you will see fewer jobs created. The cost is very real, but nowhere is it properly considered in the Government’s own impact assessment. That acknowledges a likely 15% rise in employment tribunal claims, but makes no attempt to model the knock-on effect on hiring behaviour. The tribunal system, as we know, is already overstretched, with cases often taking more than two years to resolve. A 15% increase without corresponding investment will only deepen the backlog, and employers will know that they are walking into a system that is clogged and uncertain.

Then there is the statutory probationary period, which the Government propose with no real clarity. The Bill fails to explain how this period interacts with the obligation to act reasonably or whether there will be a different standard for dismissals during this window. Will there be a list of fair reasons? Will an employer be able to extend the period if performance takes longer to assess? None of this is addressed. As any employer will tell you, uncertainty in employment law leads not to innovation but to caution and legal advice.

Perhaps the most troubling aspect of the Government’s approach is its likely effect on social mobility. When you raise the legal risks of hiring, it is not the well-connected, polished graduate who loses out but the individual on the edge of the labour market, the person returning to work after illness or parenting, the school leaver with no contacts, the ex-offender with a spent conviction, the refugee trying to prove themselves. The Government’s impact assessment recognises this risk, because it says that making unfair dismissal a day one right

“could damage the employment prospects of people who are trying to re-enter the labour market, especially if they are observed to be riskier to hire”.

Those are not my words but the Government’s.

The same is true for a “cultural fit”, which the Minister dismissed in Committee as an illegitimate reason for dismissal. She said:

“The Government do not believe that an employee not being a cultural fit within an organisation should be a fair dismissal”.—[Official Report, 21/5/25; col. 334.]


However, “cultural fit” is not a euphemism for prejudice; it is about whether someone complements the way in which a team works, the style of communication or the pace and rhythm of a workplace. This is particularly acute for a small business. Hiring mistakes are costly. Even a highly skilled worker takes time to reach full productivity and the cost of advertising, onboarding, training and then managing a dismissal is not trivial. If employers cannot be confident that they will have a window in which to assess a new hire, including on soft factors such as team dynamics, initiative or client manner, they will become more conservative. They will play it safe. Who loses then? Again, it is the person who just needed someone to give them a chance.

My amendment offers a better path. It reduces the qualifying period for unfair dismissal from two years to six months, a meaningful extension of protection for workers. It also creates an initial period of employment following that six months in which a simplified process and lower compensation cap would apply. That strikes a fair balance, giving employers space to assess suitability while ensuring that bad-faith dismissals still carry consequences. Crucially, it also removes the sweeping power given to the Secretary of State in the Government’s clause to modify Section 98(4) of the Employment Rights Act, a power that could drastically shift the fairness test without proper parliamentary oversight.

Employees already have day-one protections against discrimination and automatically unfair dismissal, as they should. However, general unfair dismissal should be subject to a short and defined qualifying period that employers understand and workers can plan around. My amendment delivers that clarity. It also avoids a situation where employers are left wondering whether a dismissal based on fit or reliability will land them in court, even when handled with care.

We have to be clear that jobs are not abstract concepts; they are costs. In the early stages, even the most promising employee is an investment that takes time to repay. Employers need space to make those judgments. This Bill, as it stands, puts a thumb on the scale in favour of caution and against second chances. That is not fair, that is not just and that is not how we grow a dynamic, inclusive labour market. I beg to move.

[Lord Vaux of Harrowden (CB)]

My Lords, I have two amendments in this group, Amendments 50 and 67, which, like the amendments the noble Lord, Lord Sharpe, has just spoken to, which I have also added my name to, relate to day-one unfair dismissal rights. I thank the noble Lords, Lord Leong and Lord Katz, for making time to discuss this issue with me, for which I am very grateful.

The introduction of day-one dismissal rights will have a range of consequences: in particular, additional costs to business, which the impact assessment says will run to hundreds of millions a year and the Government themselves says will fall disproportionately on smaller businesses; and greater numbers of tribunal cases on an already overloaded tribunal system. But the most important impact is on people who are looking for work, especially those with riskier profiles: young people trying to get their first step on the employment ladder; people trying to get off benefits; people with health issues; people changing careers; ex-offenders and so on. The Government rightly want to get all of these into work, but the Bill will make that more difficult, not easier.

The current law, with the two-year qualifying period, allows an employer to take a risk on someone—to give them the benefit of the doubt—without facing the risk of an employment tribunal claim if it does not work out. This Bill ends that. An employee will be able to claim for unfair dismissal from day one, and the only valid grounds for fair dismissal will be capability or qualification to do the job, conduct by the employee or some other undefined substantial reason relating to the employee. These reasons are essentially the same as the current reasons for fair dismissal after the qualifying period in today’s law, and they cannot be changed by the regulations that the Government intend to use to create a new—again undefined—type of probation period. Employers will no longer be able to let someone go during a probation period because it is not working, without risking an unfair dismissal claim.

So what will be the result? Simply, employers will now have to think twice before hiring anybody with a less than perfect employment record. The Bill will make it harder for an employer to take a chance on such people, to give them the benefit of the doubt. To quote the Federation of Small Businesses:

“all it’s going to do is make small employers more reluctant to recruit and fearful of being open to vexatious claims … It’s those furthest from the jobs market who will then suffer, because the less risk small employers can afford to take, the fewer second chances, fresh starts and first jobs they’ll be able to offer”.

If anyone is in any doubt, the Government themselves state the same effect in the impact assessment. I will not repeat what the noble Lord, Lord Sharpe, quoted, but this is what the Government also know and think.

We already have a million young people not in employment, education or training—the so-called NEETs. If we want to solve that, we need employers who want to take them on, who will take a chance and give them that first all-important opportunity. So, why on earth would we want to make it riskier for employers to take that chance?

You would think, therefore, that there must be a good, well-evidenced reason why this Government would decide knowingly to make it more difficult for young people to get their first opportunity to work. I have asked several times during this process for evidence that the existing law is in fact causing any problem. There is no evidence given in the impact assessment, and I have had no real answer to that question. In Committee, the Minister’s answer was:

“We have worked with academics who are looking at this subject. I reassure the noble Lord that we have looked at this and are confident that the benefits in this particular case will outweigh the risks”.—[Official Report, 21/5/25; col. 333.]


That really is not good enough to take action that the Government themselves acknowledge will damage the life chances of the most vulnerable or those just starting out.

Employers do not dismiss people lightly, even during a probationary period; hiring and training are expensive and time-consuming, so employers are strongly incentivised to try to get it right. But it is a fact of life that sometimes, with no fault on any side, things do not work out.

As the Minister knows, the noble Baroness, Lady Finlay of Llandaff, wanted to speak in this debate, but, unfortunately, she cannot be here today. She has asked me to point out the impact this change could have on GPs. Not being able to let someone go if the fit or culture is wrong is extremely serious for a small business—as the noble Lord, Lord Sharpe, described—but in a GP practice it could put lives at risk. GP practices tend to be small teams who must work together well and with great understanding and support. An employee who does not fit with the rest of the team could lead to miscommunication, appointment issues and so on. In healthcare, such errors could compromise patient welfare and could even have fatal consequences. It is essential that people can be easily let go if it is not working out in the early stages of their employment.

Companies House: Filing of Annual Accounts by Small Companies

Lord Vaux of Harrowden Excerpts

Tuesday 8th July 2025 Lords Chamber

[Lord Leong (Lab)]

I thank the noble Lord for that. I hope that he has read our industrial strategy. We aim to reduce something like 25% of regulation on businesses. Currently, as it stands, as the noble Lord will know, most companies have to file abbreviated accounts with Companies House. So what we are asking is nothing more than what they are already doing, so we are not adding additional burdens on small businesses.

[Lord Vaux of Harrowden (CB)]

My Lords, thanks to the efforts of this House, the Economic Crime and Corporate Transparency Act introduced a new power for the Government to regulate in order to find out about people holding shares as nominees for other people, which is one of the easiest and most common ways by which beneficial ownership of companies can be hidden. A whole industry has built up to facilitate this. What assessments have the Government made of the misuse of nominee shareholders, and what plans do they have to use those regulations?

[Lord Leong (Lab)]

The noble Lord makes a very interesting point. Let me just give your Lordships an insight into what Companies House has done since the Act came into force. We have been cleaning up the Companies House database, and we have a five-year timeframe to really clean it up. The first thing we will do is to verify those individual directors. There are something like 7 million directors at Companies House and, currently, some 250,000 directors have voluntarily verified themselves. Towards the autumn of this year, through the GOV.UK One Login, we hope to have close to all the 7 million verify who they are, so that we can get to the bottom of whether who they say they are is exactly who they are.

Telecommunications Fraud: Reimbursement of Victims

Lord Vaux of Harrowden Excerpts

Wednesday 14th May 2025 Lords Chamber

Asked by

[Lord Vaux of Harrowden]

To ask His Majesty’s Government what steps they intend to take to ensure that technology and telecommunication firms contribute to the cost of fraud prevention and the reimbursement of victims of fraud that arises on their platforms.

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

Through regulation, including the Online Safety Act, companies are now required to stop fraudsters abusing their business models. All parties with a role to play should prioritise tackling fraud, including the tech and telco sectors, which are key partners in the prevention of fraud. However, more can be done, and further action will be set out in the Government’s forthcoming fraud strategy.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank the noble Lord for that Answer. As noble Lords will be aware, banks now have to reimburse fraud victims. However, according to the PSR, over 70% of scams by volume originate online, 54% from Meta alone, and 31% of scams by value originate from telecoms companies. Yet, despite facilitating most of the scams, technology and telecoms companies have no liability for the losses and are subject only to voluntary charters. Indeed, one large telecoms company—let us name it: BT/EE—has started to charge extra to warn people that calls or texts might be a scam. The voluntary charters are clearly not working, so does the Minister agree that tech and telecom companies will take serious action only if they have a real financial liability for the losses, just like the banks do? Does he also agree that it is a disgrace that a company such as BT/EE is profiteering from scams, and will he take action to stop that before the others follow?

[Lord Hanson of Flint (Lab)]

I will certainly look separately into the noble Lord’s question in regard to BT and so on. He will be aware that since March 2025, Ofcom’s illegal content code of practice has come into effect. That means that platforms such as Meta and the others he has mentioned, which contribute through hosting illegal activity and significant levels of fraud, now have a mandate to proactively stop and remove fraudulent content, or else they will face fines and other potential measures. The noble Lord mentioned the disparity between the banks and the platforms. We have the Online Safety Act, which has only just come into effect, and we have potential areas to look at in the fraud strategy. I am aiming to publish the fraud strategy at the end of this year and early next year at the latest. We are working through that currently, and I keep all options open.

Passport e-Gates Network Outage

Lord Vaux of Harrowden Excerpts

Monday 13th May 2024 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, the eGates software is provided by a fairly small Portuguese company called Vision-Box, under a contract that was signed in 2013 and has been extended to at least 2027. As someone who spends most of his life working in software mergers and acquisitions, I can say that it would be pretty normal, when a key contract such as this is entered into with a smaller supplier, that a change of control clause would be included in the contract, allowing the customer—the Government in this case—to obtain safeguards about future performance before any takeover of the company is completed.

Vision-Box was taken over in April by a very large Spanish group called Amadeus. Was there a change of control clause in the contract? Were suitable undertakings obtained from Amadeus before Vision-Box was acquired? Can the Minister confirm that the outage was not related to changes made by Amadeus as a result of the takeover? Looking forward, I understand that the Vision-Box software is currently based on Windows 10, which will no longer be supported beyond 2025—so is the Minister confident that Amadeus is committed to a suitable upgrade path?

[Lord Sharpe of Epsom (Con)]

I will address the last points first. As I said, it was not a software issue that caused this particular outage, so I can deal with that relatively straightforwardly. As regards government contracts, as the noble Lord will be aware, I think they are all published on GOV.UK. I am not sure if this one was or if I am wrong there, but I will check and find out and come back as required.

[Lord Vaux of Harrowden (CB)]

Is it redacted?

[Lord Sharpe of Epsom (Con)]

Yes, I will also check on that.

I did not know about the Amadeus takeover of this particular Portuguese company, but I will make further inquiries and, if there is more to be said, I will write to the noble Lord.

Economic Crime and Corporate Transparency Bill

Lord Vaux of Harrowden Excerpts

Report stage
Tuesday 27th June 2023 Lords Chamber

I have said all of this so many times before that I no longer need to say it again; but I have. I have now finished. I may well be saying the same thing next year, but I hope not. If I do, please bear in mind that you will not be hearing it for the first time.

[Lord Vaux of Harrowden (CB)]

My Lords, I will briefly add my support to the amendments proposed by the noble and learned Lord, Lord Garnier, which try to strengthen the failure to prevent clauses the Government have proposed. I welcome those clauses and the changes the Government have added at this stage. In particular, I strongly support Amendment 110, to which I have added my name, which removes the restriction of this offence to large companies.

Let us be clear what this failure to prevent offence deals with. It does not cover, for example, the use of a company’s services by fraudsters, something I greatly regret. I am sure that—along with, I hope, the noble Baroness, Lady Morgan—we will come back to this in another Bill. It actually applies only to situations where somebody associated with the company, such as an employee, commits a fraud that is intended to benefit the company. Let me emphasise that: it applies only to frauds carried out by associates such as employees or agents, and only where those frauds are effectively committed on behalf of the company. It is pretty restricted.

When I was in business, frankly, it never occurred to me that such situations were not already caught by the law. Surely, it must be a fundamental principle that a company should take reasonable steps to prevent its employees committing fraud on its behalf. But the Government seem to take a different view. Having been dragged somewhat reluctantly into putting forward their own amendments to create this offence of failure to prevent, they have decided it should apply only to larger companies. As we have heard, they have set the threshold so that less than 1% will be covered.

The argument, as we have heard, is that the cost would be disproportionate. The Government have come up with some costings to support this. I am afraid I do not think I am the only person who simply does not find those costings credible. Any reputable company should, and I believe generally will, be doing this already. There are some things we should ensure that companies do anyway. A good example is that companies must ensure that health and safety rules are followed. It is not an excuse to say, “It wasn’t me; an employee caused the accident”. Nor is it an excuse to say, “My company is too small to follow health and safety rules”. We do not give small companies an exemption from health and safety, tax evasion or bribery legislation. Why would we do so, uniquely, for fraud—committed on the company’s behalf?

If the Government are genuinely worried about the cost, they can deal with that easily enough by issuing timely guidance that sets out what steps would be reasonable and the circumstances in which no additional procedures would be required, which is likely to be the case for most small enterprises. Amendment 125D makes some sensible suggestions in that regard.